Author Topic: Surging bad debt fuels Bangkok Bank Q1 profit drop  (Read 338 times)

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Offline thaiga

Surging bad debt fuels Bangkok Bank Q1 profit drop
« on: April 20, 2016, 06:32:56 PM »
Surging bad debt fuels Bangkok Bank Q1 profit drop

Bangkok Bank Plc reported an 11.6% drop in first-quarter net profit, from a year earlier as a surge in bad debt prompted it to book higher loan loss provisions.

Net profit at 8.32 billion baht for the January-March quarter was however slightly higher than an average forecast of 8.25 billion baht in a Reuters poll. Profits rose 8.3% from the previous quarter, the bank said in a statement Tuesday.

Non-performing loans (NPLs) jumped 30% from a year earlier to 62 billion baht, the highest level since 2007, pushing the bank's bad debt ratio up to 2.9% of total lending at the end of March, up from 2.8% at end December, it said.

Bangkok Bank aims for loan growth of 3%-5% this year but saw loan growth of only 0.3% in the quarter, while its provisions increased by 22%.

The banking sector has suffered from sluggish loan demand and rising bad debt as weak exports and subdued domestic demand drag on Southeast Asia's second-largest economy. Last month, the central bank cut its 2016 growth forecast to 3.1% from 3.5%.

Tracking other major banks, Bangkok Bank cut its minimum lending rate on April 5 to help boost the economy. Analysts say the rate cut is likely to drag on the bank's net interest margin and profits from the second quarter.

Bangkokpost
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